Last week we wrote about the USD/NOK currency pair. We considered the possibility of longing the US currency against the Norwegian krone and specified the target at 8.6900. As you can see from the chart, the target was reached. Moreover, the US currency reached the 8.7280 level. In this article, we will try to answer the question “What about the correction?”
On the daily chart, the currency pair is already forming signals for the correction. This is not surprising given that we have tested a horizontal resistance level at around 8.7100.
The pair moves in the direction of a shorter 9EMA. If it breaks the 8.5960 level (which will also mean that the pair has moved through the 38.2% Fibonacci retracement at around 8.6025), you can think of scalping to the 8.5637 level, which will be 50% correction from the local bull trend, which began on January 31, 2019.
The Williams% R and MACD indicators also hint at the possibility of a downward correction. The indicators’ lines began to gradually unfold in order to give a signal.
We advise you to be extremely careful when opening short positions, since the prevailing bullish trend can gain strength again after the correction.
Among the fundamental factors that can affect the nature of the movement, we recommend that you pay particular attention to US statistics that will come out between Thursday and Friday — the country will release long-awaited macroeconomic indicators on retail sales.
In addition, Norway will publish the trade balance on Friday.